**GAO-02-471**                      Published: Apr 25, 2002. Publicly Released: May 10, 2002.                  

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## Highlights

U.S. officials are interested in transferring some government social welfare functions to nongovernmental organizations (NGOs). One area is in the delivery of foreign assistance to developing countries and countries transitioning from communism to market-oriented democracy. Many NGOs active in international development have years of experience working overseas and have received millions of dollars in funds from private sources as well as the U.S. government. USAID directed $4 billion of its $7.2 billion assistance funding to NGOs in fiscal year 2000. However, the amount of funding provided by specific types of assistance is unknown, because USAID lacks comprehensive and reliable data. USAID uses various types of contracts, grants, and cooperative agreements to provide assistance through NGOs. This range of funding mechanisms allows USAID flexibility to draw on the strengths and expertise of a large community of experienced NGOs. The different mechanisms have advantages and disadvantages in terms of cost, time, selection of potential implementers, and USAID's authority to oversee assistance activities. Compared with USAID, official donors provide more of their funding to foreign governments and private donors and spend more of their funding on unsolicited proposals. USAID emphasizes the use of funding mechanisms that involve greater programmatic and financial controls and competition for funding among NGOs.

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## Topics

International Affairs

Charitable organizationsEconomic developmentFederal aid to foreign countriesForeign economic assistanceProgram evaluationDeveloping countriesInternational economic relationsNonprofit organizationsProcurementForeign assistance